It was hard not to admire Vince Cable yesterday. I was put in mind of Ernest Shackleton, stranded on a sheet of ice, his policies crushed to fragments, his men mutinous. Yet through his calm, sang-froid and powers of leadership, he managed to lead his team to safety. Not one life was lost – though of course millions of votes might well have perished in this inhospitable terrain.

He was defending the government's new policy on university tuition fees and graduate debt, or "progressive graduate contribution" as it is now called, since it sounds better. Both David Cameron and Nick Clegg were watching, silently but desperately praying that Vince would make it through.

Naturally the Lib Dems had opposed any such thing as an increase in fees and a tax on the result. But the policy was now an abandoned hulk. "In the current economic climate, we accept that the policy is no longer economically feasible," Vince said, almost with relish.

"Shocking!" shouted a Labour MP. Some of them seem to have convinced themselves that if they were still in power there would be no crisis and we could go back to free universities for all, dished out like yoghurt samples at railway stations.

It was not an easy trek. John Denham, one of the few members of the shadow cabinet we had heard of before last week, pointed out that Nick Clegg had said that an increase in student fees to £7,000 would be "a disaster".

"What exactly," he asked, "is the difference between the £7,000 that would be a disaster and the £7,000 fees you are now proposing?"

He painted a horrifying picture. Some universities were going to lose 90% of their funding. Many graduates would still be paying off their debt when their own children went to university. We were starving men, possessing a can of corned beef but no tin opener. "You cannot build a future on debt," he said.

This was, perhaps, a mistake. Not only did it get a sarcastic jeer from the Tories, but it made Vince ratty. Vince is never ratty. He knows that to win the confidence of the crew behind him he must remain placid and reasonable at all times. But he allowed himself one eruption. Mr Denham had "the extraordinary nerve to talk about debt." In an ideal world, people would go to university for free, as he had done.

"But we are not in an ideal world. We have inherited a massive financial mess, and we must get in touch with reality." This was greeted by an enormous cheer from behind him.

Several MPs pointed out that some of the best students would not now be able to go to the best universities, and that the country would be the poorer for it.

Vince tried a trick answer: "Yes". Simon Hughes, perhaps a Lib Dem rebel, made a similar point. "Yes indeed," said Vince. There was nobody he wouldn't agree with. Morale had to be kept up. It would take very careful consideration.

Someone pointed out that he had signed a pledge against the fees. "Yes, I signed the pledge. But the current financial situation is appalling, truly appalling. All pledges have to be re-examined from first principles."